One of the great puzzlements of this age of battery-powered gadgets is that, despite a good half-century of amazing improvements in gadgetry – from toys to telephones and beyond – there has been precious little improvement in the batteries that power them. Rarely has the need for a better mousetrap been so apparent and so unfulfilled.

This may be about to change. The lead story in the current issue of Red Herring, the online investor’s magazine, describes how one small German start-up company, Smart Fuel Cell, is about to become the first to begin production of a micro fuel cell; that is, a power source that truly keeps on going and going and…

The story, by writer Bridget Eklund, concisely lays out the problem: although the variety, number, capabilities and power demands of small electronic devices increase rapidly, the power capacity of the dry cell batteries used in most of those devices improves only about 5 percent every two years. The result is that some 4 billion dead batteries are tossed every year in the United States alone. Only six publicly traded companies and a similar number of startups are engaged in developing the obvious alternative.

Fuel cell technology is not terribly new, nor is it advancing at a blistering pace. Fuel cells remain rather large(Ms. Eklund uses the portable refrigerator as a comparison) and they run on hydrogen gas, which is fairly expensive, extremely volatile and difficult to transport and store. Smart Fuel Cell’s engineers are gradually shrinking their product down to laptop/camcorder battery size and are confident that AAA is within reach. Their cells run on liquid methanol fuel – cheap and safe – which releases hydrogen gas within the cell; the exchangeable fuel tanks contain enough methanol to run a household toaster for a month. The cell is now being tested in traffic systems, remote sensor applications, and camping and outdoor equipment, a laptop battery may hit the market by October, bigger players in the consumer electronics field, Casio and Samsung, are expected to introduce their micro fuel cells within a year.

There are, of course, the typical hurdles to clear. Micro fuel cells initially will be considerably more expensive than batteries and financial analysts continue to warn prospective investors about the difficulty of replacing an entrenched product with something new (although the fervor with which the public embraces new gadgets seems a notable exception). Still, at a time when the economy seems awfully worn and shabby, it’s good to be reminded that corporate accounting is not the only corner of the business world capable of innovation.